Fri 25 Apr 2008
Savills calls for strategy rethink
Savills is calling on developers to adjust to a changing residential market and rethink their development strategies in order to cope with this year’s tough trading conditions.Recent research conducted by the firm shows that residential land prices for greenfield and brownfield land fell by 8% between December and March, supporting evidence that homes sales are slowing across the board, says Andrew Brentnall (pictured), associate director and development consultant at Savills’ Nottingham office. “The issues for housebuilders are not just prices, but also rates of sale. An elongated development programme due to slow sales can have a dramatic effect on construction costs, therefore decimating profit margins.”
Savills is currently working to reappraise sites and look at alternate land uses for typically residential sites, replanning residential planning consents for commercial usage where possible to extract land value quickly. “Developers, investors and private individuals should all consider that it’s now even more important to obtain a commercially viable planning consent,” added Nick Grace, who heads up Savills’ planning team for the East Midlands. “Market growth is not going to get people out of trouble with unviable schemes, so any application should be appraised and tested by a development appraisal before proceeding. The crossover of planning and development has never been more vital, and we would urge that a time of change means fresh approaches.”
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